Top Story: State Department's Reporting Requirements on Responsible Investment in Myanmar Take Effect
Top Stories:
- Burma Responsible Investment Reporting Requirements: Reporting requirements are now in effect as of July 1, 2013. The requirements apply to any company or person that invests more than $500,000 will have to file an annual report detailing programs they have in place to ensure responsible investment. The exception is in cases of partnership with MOGE (Myanmar Oil and Gas Enterprises) where any amount applies. Although no penalty applies for not having responsible investment programs in place, the reports will be publicly available.
- Norway's Telenor and Qatar's Ooredoo won licences to provide telecommunications services in Myanmar, bringing foreign companies across one of the world's last telecoms frontiers. The lower house of parliament (hluttaw) voted to delay the award of the two licences until a new telecommunications law was enacted, but the administration elected to move forward with awarding the licenses. Ooredoo’s win is particularly notable given the recent Buddhist-Muslim tensions in Myanmar. Hluttaw Speaker Thura Shwe Mann told a US-ASEAN Business Council delegation that he would move forward with a revised telecoms law this week.
- Myanmar President Welcomes US-ASEAN Business Council Delegation: According to the President, the US-ASEAN Business Council served as an important institution for US-ASEAN relations. He added that only peace and stability could bring about development of the national economy, through which the nation could make possible advancement towards a democratic goal. To fulfill that aspiration, the nation needs the support of the US-ASEAN Business Council. The President added that his objective of cutting the country’s poverty rate by 16 per cent in 2015 was underway as the country has huge economic potentials with a wealth of natural resources and adequate manpower. He also mentioned the country’s strategic location flanked by South Asia and Southeast Asia offers a vast market for international investors.
Defense and Security
U.S to support Myanmar’s Peace Talks | Eleven, June 22
The government of the United States will support Myanmar’s peace talks, said Mrs Erin Webster-Main, the political officer of the US Embassy in Yangon. The move came from the second-time peace talks organized by the Union Peacemaking Work Committee (UPWC) and the Karani National Progressive Party (KNPP) held in Loikaw, Kayah State on June 19 and 20. “I have been an observer to the peace talk at the invitation of the government and the KNPP. Despite not knowing how long the peace talk will last, the US government will have to encourage that and render better assistance,” said the political officer. She added that the peace talks were the best way to tackle the prolong-conflicts and the sustainable development for the region. They supported much to the peace talks.
Myanmar Navy starts submarine training in Pakistan | Janes, June 20
A small contingent of Myanmar Navy (MN) personnel has begun submarine warfare training in Pakistan, a move that suggests Myanmar is finally taking concrete steps towards developing a subsurface capability. Around 20 officers and ratings arrived in Karachi in late April/early May to begin basic familiarisation training with the Pakistan Navy (PN), according to diplomatic sources. It is likely the contingent is based at the PN's Submarine Training Centre at PNS Bahadur, an onshore facility in Karachi that offers simulator training in diving, propulsion, and sonar tape listening and analysis. The PN's submarine service has relied on French boats almost since its inception in the 1960s, and today operates two obsolescent Hashmat-class Agosta-70 boats and three modern Khalid-class Agosta-90Bs.
Economics
Myanmar Mints Multi-Millionaire Tycoons | Forbes, July 2
As Asia’s forgotten last frontier Myanmar opens up, after 50 years of military rule, Serge Pun stands out as its poster boy. Shares of his Singapore-listed, property-to-farming company are up 160% in the last year, making Yoma Strategic Holding the most valuable company in Myanmar with a market cap just shy of a billion dollars ($870 million). Pun’s Yoma recently posted 105% increase in full year earnings to $12.3 million in FY 2013. Revenue from the real estate division rose 60% from $37 million last year to $55.9 million this year. Net profit in that group was up 140%. Last month, when global markets went into a funk, Yoma’s share held steady, reaffirming investor confidence in Myanmar’s future and Pun’s ability to harness it. Interestingly, Myanmar does not even have a stock exchange as yet!
Myanmar's Pivot To West Is No Shoo-In For U.S. Carpetbaggers | Forbes, July 2
Myanmar’s transition to democracy has drawn fulsome praise from Western powers who recognize a pivot when they see one. Conversely, the biggest external loser is China, which backed the former junta and was rewarded with sweetheart deals for natural resources. So when Myanmar announced last year that it was opening up its telecoms sector to foreign investment, the bidding process took on a geopolitical flavor. Dozens of companies from around the world expressed interest in entering one of Asia’s last untapped telecoms markets. Twelve consortia submitted final bids for two available wireless licenses. One of the strongest pairings, at least in terms of size, was between China Mobile and Vodafone Group, but they then pulled out, saying the returns didn’t justify the outlay. That left a crowded field of operators that spanned the globe, from Jamaica to Singapore and Japan to South Africa. At a time of cheap money and slow growth in developed markets, Myanmar (Burma) is a golden opportunity.
U.S Companies investing in Myanmar Must Show Steps to Respect Human Rights | NYTimes, June 30
When the Obama administration lifted economic sanctions on Myanmar last year, encouraging American investments after decades of treating the nation as a pariah, it did so with a significant caveat. For the first time, effective on Monday, American companies investing in Myanmar must detail in public reports the steps they have taken to respect human and labor rights, to protect the environment and to avoid corruption in an economy warped by international isolation and military dictatorship. The reporting requirement represents a novel and, to some, controversial effort by the administration to shape business practices in an emerging economy that has embarked on a remarkable though hesitant opening under Myanmar’s reform-minded president, U Thein Sein.
Myanmar to renegotiate huge resource deals: think tank | TheSunDaily, June 25
The Myanmar government plans to renegotiate billions of dollars of natural resource deals as it imposes tougher environmental standards and clamps down on corruption, a leading US think tank said Monday. The country's powerful military and Chinese firms could be most affected by the move as the government pursues a radical reform agenda, turning away from decades of junta rule, according to the Asia Society.Myanmar has huge reserves of resources – ranging from petroleum to tin, timber and precious gems – which have become notorious for corruption and crony capitalism. "Apparently, the government is preparing to renegotiate all previously agreed-upon projects to ensure that appropriate safeguards are in place and to subject future projects to stricter social and environmental controls," said a report by the society, which has worked closely with the old junta and new government.
Chinese Investment in Myanmar: Lessons and Opportunities | CogitAsia, June 25
In April 2013 China’s newly appointed ambassador to Myanmar Yang Houlan officially encouraged increased corporate investment from Chinese corporations into Myanmar, which he feels will yield mutual benefit. However, the reality is that China has cut its investment in Myanmar since the $3.6 billion Myitsone dam project was halted last September because of domestic opposition. Very little new investment has occurred since then, although investment stock from mainland China is still the largest in Myanmar, with 34 projects totaling $14.14 billion as of June 30, 2012.
Why is this happening? A significant number of ongoing deals are still progressing – albeit on a rocky road—for instance, protests against the Sino-Myanmar Monywa copper mining operation over land acquisition and pollution have slowed progress on that project. More Chinese companies are adopting a “wait and see” attitude because of potential risks such as ethnic conflicts, political instability, and a deficient legal system.
Energy
Myanmar's Energy Sector Must Develop Rapidly To Keep Up With Its Economic Growth | IBTimes, July 9
Myanmar’s newly open economy may have earned the country the status of the next global investment darling, but one hurdle stands in the way of Myanmar’s growth – its lack of stable energy. Electricity is only available to 25 percent of the country’s population currently. If foreign investors like Telenor and Ooredo, the companies that were awarded the coveted telecom licenses, are to make headway in Myanmar, that number will have to grow fast. The country has a number of other challenges, such as the need for an independent judiciary and property rights, corruption and the lack of human capital, but a dependable supply of electricity is listed by domestic and foreign businesses as the greatest stumbling block, according to Invest Vine, a news portal that covers Southeast Asian business opportunities. Myanmar is actually well-endowed in energy resources. It has 7.8 trillion cubic feet of proven natural gas reserves, worth about $75 billion at current U.K. benchmark prices, according to Bloomberg Businessweek, accounting for 1.9 percent of known deposits in Asia.
Toshiba launched a branch office in Yangon on Wednesday at an opening ceremony hosted by its Singapore-based subsidiary, Toshiba Asia Pacific Pte Ltd, which was attended by the Chief Minister of the Yangon Region Government, Myint Swe. Toshiba Corporation revealed in a statement that it will, along with KDDI Corporation, one of the largest network solution providers in Japan, supply a modular data center for the securities exchange system in Myanmar. Toshiba won an order from major Japanese think-tank, Daiwa Institute of Research Ltd, to supply the center. The securities exchange will be opened in 2015 by the Daiwa Institute of Research and Central Bank of Myanmar in Yangon.
Myanmar Must Focus on Effective Energy Policy | FT, July 1
Energy policy sits at the heart of Myanmar’s political and social reforms, and will be one of the most important facets of change in this emerging democracy. Although just 26 per cent of Myanmar’s population has access to electricity, reforms are paving the way for a new era in the energy sector as the government looks to tackle the challenge of meeting increasing domestic demand from a growing population and industrialisation. Energy will be central to Myanmar’s re-entry into the global economic system, not only because Myanmar holds significant reserves of oil and natural gas, but also because the development of the sector will require a major transformation of the basic institutions and infrastructure that will underpin the country’s future economic growth.
The geopolitics of China’s new energy route | EastAsiaForum, June 19
China’s state-run China National Petroleum Corporation (CNPC) completed construction of a natural gas pipeline from Myanmar to China on 28 May 2013 and is close to finishing an oil pipeline. The pipeline will start delivering gas from Myanmar’s west coast in the Bay of Bengal to Kunming (the capital of China’s Yunnan province) on 1 July, while the oil pipeline will transport China’s crude shipments from the Persian Gulf and Africa when it is completed later this year. The new route for oil and gas imports to China is a significant imprint in the geopolitical landscape of the region and forms a key factor in the strategic calculus of major actors. The pipelines are also the first signs of China realising the dream of opening up its southwest provinces to the Indian Ocean. China is moving closer toward establishing what has been described by some Chinese scholars as Beijing’s ‘two-ocean strategy’ — achieving naval control in the Pacific and Indian oceans.
Foreign Affairs
UN chief tells Myanmar to give Muslim Rohingyas full citizenship, end religious violence | July 10
The U.N. chief on Wednesday warned Myanmar that it must end Buddhist attacks on minority Muslims in the Southeast Asian country if it wants to be seen as a credible nation. Sectarian violence against Rohingya Muslims in the predominantly Buddhist nation has killed hundreds in the past year, and uprooted about 140,000, in what some say presents a threat to Myanmar’s political reforms because it could encourage security forces to re-assert control. Secretary-General Ban Ki-moon said Wednesday: “It is important for the Myanmar authorities to take necessary steps to address the legitimate grievances of minority communities, including the citizenship demands of the Muslim/Rohingya.” He says failing to do so could risk “undermining the reform process and triggering negative regional repercussions.”
US blacklists Myanmar general over N. Korea arms deals | AFP, July 3, 2013
The United States placed a Myanmar general on its sanctions blacklist Tuesday for arms deals with North Korea that violated the UN Security Council embargo on buying weapons from Pyongyang.
Weeks after a landmark visit to Washington by Myanmar President Thein Sein celebrated the thaw in relations, the US Treasury named Lieutenant General Thein Htay, the head of Myanmar's Directorate of Defense Industries, for the sanctions. The Treasury said the general was involved in buying North Korean military goods despite his government's support for the Security Council ban. It said he acted on behalf of the directorate, a Myanmar military agency that was placed on the US sanctions blacklist in July 2012 for arms deals with North Korea.
Once a divisive pariah, Myanmar could aid Southeast Asian unity | CSMonitor, July 2
Taking their cue in part from regional examples of cooperation such as the European Union, and buoyed by the recent economic opening of Myanmar, the 10 countries that make up the Association of Southeast Asian Nations (ASEAN) plan to form a Southeast Asian economic community by the end of 2015. An economic community would cut trade costs and make it easier to do business across Southeast Asia – adding to the region's already-burgeoning appeal to outside investors, including companies from the United States. But, despite the much anticipated opening of Myanmar and flurries of pro-integration rhetoric at events such as the ASEAN foreign ministers meeting in Brunei that US Secretary of State John Kerry attended this week, even a small-scale Southeast Asian version of the EU looks increasingly unlikely to happen by the due date.
Financial Services
Myanmar to give central bank more autonomy | ChannelnewsAsia, July 10
Myanmar is set to enact a new law in the coming days giving greater independence to its central bank, officials said Wednesday, in the latest economic reform aimed at enticing foreign investors. The new legislation was approved by lawmakers on Monday and is expected to be signed into law by President Thein Sein by this weekend, although the details have not yet been made public. "The significant thing is that the central bank will be an independent body and will not be under the finance and revenue ministry anymore," a central bank official who did not want to be named told AFP. "The central bank's mandate will be in line with international standards," the official said, adding that the president would appoint a governor and three deputy governors with the approval of parliament. An official in Thein Sein's office said the former general would sign the bill before he leaves on a visit to Europe on Sunday.
Information and Communications Technology (ICT)
Myanmar to get 3G Mobile Service Next Year | July 3, TNW
Norwegian telecommunications operator Telenor, which won a telecom licence in Myanmar last week alongside Qatari firm Ooredoo, is planning to launch 3G mobile services in the Southeast Asian country starting next year. According to a Bangkok Post report (via Tech in Asia), Telenor is targeting the complete nationwide roll-out of the 2G and 3G network using high-speed packet access technology within five years. Glenn Mandelid, the communications director of Telenor Asia, told the newspaper that the company will also install 4G-ready base stations using long-term evolution technology, as it seeks to match worldwide networks in the country that has just recently opened up its economy after years of isolation.
Facebook in Burma: Half of All Accounts Use False IDs, Says President’s Spokesman | Irrawaddy, June 28
Dismissing “conspiracy theories” that Burma’s government and military have fomented recent inter-religious violence, President Thein Sein’s spokesman pointed instead to how people spread information and stoke tensions via social media, saying that half of Burma’s 800,000 Facebook accounts use fake names. “Some small criminal cases can become a religious riot because people can go on social media,” Ye Htut, who is also the deputy information minister, said at a US Embassy seminar on “Preventing Hate Speech in Myanmar: Divergent Voices in a New Democracy.” Facebook, Ye Htut said, is increasingly a first source of news for many Burmese, with people preferring to read a four- or five-line update on the social media site rather than digesting a full newspaper story.
Mobile Deal in Myanmar Elicits Anger Over Religion | NYTimes, June 27
The Myanmar government awarded major telecommunications contracts to two foreign companies on Thursday, a milestone in the country’s opening up to the world that was immediately tainted by religious hatred. Hours after the announcement, a monk who is one of the leaders of a radical nationalist Buddhist movement called for a boycott of one of the two companies because it is based in Qatar, a Muslim country. “Did the government have such little choice?” the monk, Ashin Wimala, a leader of the 969 movement, said in a telephone interview after the government announced the winners late Thursday. “Why did they award this to a Muslim company?” The company, Ooredoo, won a 15-year concession to build and operate mobile phone networks virtually from scratch, as did Telenor Mobile Communications of Norway.
Myanmar sticks to Telecoms Plans | Reuters, June 27
Myanmar, which is offering operating licenses to global telecoms firms for the first time, will announce the outcome of the auction as planned on Thursday despite opposition in parliament. The lower house voted on Wednesday to delay the award of the two hotly contested licenses until after the enactment of a new telecommunications law that is still making its way through parliament. The ruling injected new uncertainty into the tender, which has attracted more than 90 companies and consortia including Singapore Telecommunications Ltd and Telenor ASA
Infrastructure
Myanmar Insurance to reform insurance system | Eleven, July 3
The state-owned Myanmar Insurance has announced it will reform its insurance system due to low take-up of insurance, according to company officials. "The take-up of insurance is low because the insurance is based on salary in the current insurance system. So, we are planning to change to the system that offers interest rates. I think more people will take up insurance after the system has been changed," said Aye Min Thein, managing director of Myanmar Insurance. He added that the insurers would only receive the same amount of money they have insured in the first place, even though the money value may have changed in time. According to Minister of Finance and Revenue Dr Maung Maung Thein, only 300,000 people have insurance among the 60 million people in Myanmar due to weaknesses in distribution and attraction.
Myanmar Will Build Billion Dollar International Airport Completed by 2017 | IBTimes, July 1
Myanmar is not kidding around with its plan to welcome international visitors – after committing half a billion dollars to develop its tourism industry, the country announced plans for a new international airport project, which will cost $1 billion, and is set to be completed in December 2017. By 2020, Myanmar is projected to host 7.5 million tourists annually, a figure far larger than the country’s current infrastructure is prepared to handle. As such, Myanmar is planning to invest heavily to build new airports and add to existing ones.
Myanmar healthcare system in critical condition | BangkokPost, June 24
While the recent political reforms in Myanmar hold promise for the country’s future, its long-neglected healthcare system faces a number of challenges before it can deliver effective and affordable care to the people. Although the government increased spending on healthcare in 2013, the rise brought healthcare spending to 3.9% of the country’s total budget. While the increase is promising, Myanmar remains one of the world’s lowest countries in terms of total money allocated to healthcare. In comparison, spending on the military remains high, representing 20.1% of the country’s total budget. A recent Reuters report noted that Myanmar was the only developing country in Southeast Asia where spending on the military is higher than combined spending on healthcare and education.
National Affairs
Myanmar law giving its central bank autonomy due "within days" | TheSunDaily, July 9 Myanmar is expected to enact a law within days that will give more autonomy to the central bank, which is currently part of the finance ministry, a senior official in the president's office said on Tuesday. The new law is part of a series of economic and political reforms pushed through by the quasi-civilian government of President Thein Sein, in office since nearly half a century of military rule ended in March 2011. Parliament passed the law on Monday and it now goes to the president. "The bill is expected to get to the president's office today. According to normal procedure, the president has to sign the bill into law within a week," the official said, asking not to be named since he was speaking to the media without authorisation. "Since the president is leaving the country on a state visit to the UK and France on July 14, he can sign the new Central Bank Law within days," he added.
“Sue me if I made any wrongdoing” : Minister | Eleven, June 30
Myanmar minister for President’s Office Soe Thein challenged people to sue the government ministers if found any of them do something wrong. “You should be reminded of that. If you are sure, you can sue. Sue any ministers if you're sure a minister or a group of them did any misconduct,” Soe Thein said in a press conference held Saturday in Nay Pyi Taw. The minister made such statement in the context of press freedom. He said press freedom in Myanmar would take time to catch up the situation in the United States but it was relatively improved. “We [ministers] can be met and asked at any appropriate time more easily now. That was impossible before. You [reporters] can write reports,” he said.
Special Report: Myanmar gives official blessing to anti-Muslim monks | Yahoo, June, 27
The Buddhist extremist movement in Myanmar, known as 969, portrays itself as a grassroots creed. Its chief proponent, a monk named Wirathu, was once jailed by the former military junta for anti-Muslim violence and once called himself the "Burmese bin Laden." But a Reuters examination traces 969's origins to an official in the dictatorship that once ran Myanmar, and which is the direct predecessor of today's reformist government. The 969 movement now enjoys support from senior government officials, establishment monks and even some members of the opposition National League for Democracy (NLD), the political party of Nobel peace laureate Aung San Suu Kyi.
Myanmar refugees receive long-due recognition from Government | Eleven, June 24
Although Myanmar did not recognize refugees in the past, the country now acknowledges them, according to a minister from the President Office. He made the remarks on Friday during the World Refugee Day ceremony held at Myanmar Peace Center in Yangon. It was the first time the World Refugee Day was celebrated in the country. "Myanmar did not recognise refugees in the past, but now the system has changed in our country. We now recognise refugees. We have also been to refugee camps and saw them with our own eyes," said Aung Min, minister of the President Office. Statistics show that Myanmar has around 200,000 ethnic armed troops, 446,000 internally displaced persons and around 350,000 refugees while around 2 million migrant workers are living in Thailand, said Aung Min.
Myanmar slams Time Magazine’s “Buddhist Terror” Cover | TheBusinessLine, June 24
Myanmar’s President has lashed out against Time magazine’s cover story on “Buddhist terror” for undermining Government efforts to ease sectarian tensions in the country. In a statement issued Sunday night, President Thein Sein said the Time lead article The Face of Buddhist Terror, featuring Myanmar’s extremist monk Wirathu, could be “detrimental to the trust building between religions in Myanmar, and damage the image of Buddhism which has been the main religion of Myanmar for thousands of years.” The President defended Wirathu as a member of the Sangha, the equivalent of the Buddhist clergy. “Buddhist monks, also known as Sanghas, are noble people who keep the 277 precepts or moral rules, and strive peacefully for the prosperity of Buddhism,” his statement said.